Monday, July 08, 2002


"guilt stirs me, but only to self-pity."

there's been a lot of discussion about the recent initiative in berkeley to mandate that all coffee sold in the city be certified fair trade. . .

that the citizens of berkeley themselves seem to be resisting this idea is telling enough; it clearly will not pass. and even if it did, it would clearly be too difficult to enforce. while the young lawyer backing the initiative is obviously well-meaning, i think well-intentioned liberal people have finally realized that there's a limit to what you can do with guilt when it comes to changing people's behavior.

guilt won't work, and it shouldn't be the primary means of creating change. there's no doubt that the current system's failing. but until coffee-producing countries offer serious governmental reforms, far-sighted coffee traders offer an alternative to the commodities market for high-quality specialty coffee, and international development agencies work out helpful policies, fair trade is just about the only means concerned consumers have to make a difference.

this doesn't mean that fair trade is a perfect vehicle; in fact, right now it has many problems and drawbacks. but we have to start somewhere, somehow. . .

recently, i was speaking about this problem with a well-regarded coffee roaster. he believes that the solution to the wild swings of the coffee exchange are for growers and producing countries to sign long-term, 3-year contracts with corporations and roasters. these contracts could be traded on the market themselves, perhaps, with a fixed bottom price, and hedged with tradable instruments to handle political and weather risks.

this method would combine the elements of a floor price to help protect farmers and yet the important market-making and risk-management functions needed in a modern economy. as i've said before, i don't have an advanced degree in economics, but this basic idea sounds reasonable to me. . .

posted by fortune | 6:23 PM | top | link to this | email this: | | | 0 comments